Foreign Direct Investment

A foreign direct investment (FDI) is an investment by a company in one country into a business located in another country. This is different from simply purchasing the stock of a foreign business. The investor instead establishes business relationships with the foreign company or buys assets of the company. There are three types of FDI investments: 1.) vertical — investment in the same type of business or industry, 2.) horizontal — investment in a related but different type of business or industry, 3.) conglomerate — an altogether different type of business.

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